Time for a dividend policy at RIM

4 responses

  1. Pete Toth says:

    Sounds like they are just saving for a rainy day.

    Their prudence will be applauded when the clouds give way to the sun, the moon, and stars…and the i-phone.

    “Such power there is in clear-eyed self-restraint.”
    James Russell Lowell

    Or, maybe they’re just cheap bastards…

  2. Tushar H says:

    Through a 1% dividend yield, if they loose 27% of earnings in 2009/10, how will the share price justify such lofty multiples! Add to that the “perception” of a loosing the growth-stock status.

    I bet there are some pressures felt by management to payout that cash kitty.

    Solution: one-time dividend like Microsoft to quell the demand. Maybe?

  3. Mark McQueen says:

    RIM wouldn’t “lose” 27% of their earnings if they established a dividend policy. They’d be taking 27% of their free cash flow (ie after earnings were reported; a non-income statement event) and sending those funds back to shareholders. They only thing they would “lose” in the post-dividend era that could impact earnings would be the income they generate on the incremental cash balance. If $572 million of cash was used for a dividend, the notional foregone income would represent the after tax interest income benefit of those funds had they been left in a bank generating 3%. The hit to earnings would be a rounding error in that case.


  4. Pete Toth says:

    Mad Jim Cramer says to buy RIMM. Wasn’t he pushing Bear a few weeks back?

    Sell 40 shares!

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